Africa Energy Corp (TSXV: AFE) is out several million after an offshore oil and gas exploration well turned up effectively dry. The firm indicated this morning that the Gazania-1 exploration well failed to hit commercial hydrocarbons.

The well, which Africa Energy owns a 27.5% interest in, is estimated to have cost the company US$5 million in net exposure. It was drilled within Block 2B, found offshore from South Africa, near to Namibia. The block itself is located 25 kilometres off the west coast, and covers 3,062 square kilometres.

Slated to test the extension of a discovery made in 1988 at the block, the well was drilled to a total depth of 2,330 metres after several delays. While gases associated with light oil were encountered, gases were not at a commercial level for production. The company has stated that at the very least it proves that an active hydrocarbon system exists on the block, with Jan Maier, VP of Exploration for Africa Energy, stating that “Early interpretation indicates that the trapping mechanism is not effective at this location.”

A well previously drilled on the block in 1988, A-J1, reportedly hit reservoir sandstones between 2,985 metres and 3,350 metres, which flowed 191 barrels of oil per day.

Given the failure of the well, it will be logged and then plugged and abandoned. Analysis is expected to be conducted on the results to determine the next steps for the block.

Africa Energy last traded at $0.315 on the TSX Venture.

Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.